The purpose of this paper is to report the findings from the ACFT 2013 survey in order to provide an overall picture of the nature of consumer fraud in Australasia.
Australasian Consumer Fraud Taskforce
The ACFT, chaired by the Australian Competition & Consumer Commission (ACCC), was formed in March 2005 and is comprised of 22 Australian and New Zealand governmental regulatory agencies and departments that have responsibility for consumer protection regarding frauds and scams, including consumer protection and policing agencies at the state and federal levels. The ACFT also has a range of partners from the community, non-government and private sector that have an interest in increasing the level of scam awareness in the community. The aim of the ACFT is to apply a coordinated approach to reduce the number of incidents and the impact of consumer frauds and scams. In order to meet this aim, the ACFT coordinates a week-long information campaign each year, timed to coincide with global consumer fraud prevention activities.
Since 2006, the AIC has conducted an annual survey to assess consumer fraud experiences. See Smith (2007) for the results of the pilot study conducted in 2006, Smith and Akman (2008) for the 2007 survey results, Budd and Anderson (2011) for the results of the 2008 and 2009 surveys, Hutchings and Lindley (2012) for the 2010 and 2011 survey results, and Jorna and Hutchings (2013) for the 2012 survey results. The survey reported in this paper ran for six months between January and June 2013, which included the annual Fraud Week conducted by the Taskforce.
Defining consumer fraud and scams
According to the Australian Bureau of Statistics (ABS), scams are defined as
a fraudulent invitation, request, notification or offer, designed to obtain someone’s personal information or money or otherwise to obtain a financial benefit by deceptive means (ABS 2012: np).
While the terms ‘fraud’ and ‘scam’ are often used interchangeably, scams are generally considered to be a subcategory of fraud, with ‘fraud’ referring to matters involving dishonesty and deception. There are a range of consumer fraud activities that may be classified as scams. Nine common types of consumer frauds were explored in the 2013 ACFT survey namely:
- advance fee fraud (money transfer scams);
- dating scams;
- financial advice scams;
- boiler-room scams;
- inheritance scams;
- lottery scams;
- work from home scams; and
- computer support scams.
An additional ‘other’ category was offered to respondents for scam types that did not fall into the supplied categories. ‘Boiler-room scams’ was a new scam type for the 2013 survey. Its inclusion was as a result of consultation among the ACFT members after the release of the Australian Crime Commission (ACC & AIC 2012) factsheet Organised Investment Fraud. Definitions for each scam type is provided in Table 1.
|Advance fee fraud/Nigerian 419 scams||Advance fee frauds or Nigerian 419 scams have existed throughout history and have adapted to advances in technology. Generally, these scams are communicated by email or letter seeking assistance to transfer a large amount of money overseas. These are the most commonly complained about scams in Australia according to the ACCC|
|Dating/social networking scams||Dating and social networking scams may be conducted through illegitimate and legitimate dating or social networking websites and often take the form of requiring a payment for each email sent and received by a potential match. Alternatively, scammers may hook victims by posing as a potential partner and then claiming to have an ill relative or severe financial problems and seek financial assistance from the ‘love interest’ they met on the site. Due to the trust already established, victims may be more easily duped and in disbelief when scammers cease communication after money has been sent|
|Financial advice scams||Financial advice scams are undertaken by scammers cold calling from overseas offering advice on shares, mortgage or real estate ‘investments’, ‘high-return’ schemes, option trading or foreign currency trading. The advice generally does not lead to increased wealth|
|Boiler-room scams||Requests to buy, sell or retain securities or other investments (including superannuation investments). Usually offered through cold calling by scammers who seek to sell worthless shares or investments to recipients|
|Inheritance scams||Inheritance scams are usually sent by a fake lawyer or bank purporting to act for a deceased estate and may falsely claim that a distant relative has died and through some means has left the target a large inheritance|
|Lottery scams||A lottery scam may be delivered by email, text message or pop-up screen falsely claiming the target has won a prize or competition|
|Phishing||Phishing refers to emails that deceive people into giving out their personal details and banking information. They are increasingly being sent by SMS|
|Work from home scams||Work from home scams are often promoted through spam emails or advertisements on noticeboards; however, are usually not advertising real jobs. Work from home scams may be fronts for illegal money-laundering activities or pyramid schemes|
|A person representing themselves as someone from a computer support centre||Computer support centre scams occur when recipients receive (mainly) telephone calls from scammers claiming they are from well-known computer manufacturers or businesses that can fix problems with the recipients’ computers. Scammers may ask for money, personal details or passwords or seek to sell worthless products to fix computers|
Source: AIC ACFT Survey 2013; ACCC 2013, 2011